News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/F7qhF7cazx
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.38% 🇨🇭CHF: 0.29% 🇨🇦CAD: 0.28% 🇯🇵JPY: -0.03% 🇦🇺AUD: -0.22% 🇳🇿NZD: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/uDphropBki
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Gold: 0.68% Silver: 0.37% Oil - US Crude: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/GjCpxqPpKk
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.55%, while traders in Germany 30 are at opposite extremes with 80.61%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/XBXs1LXXEF
  • Ontario Premier: Ontario is extending its stay-at-home order to six full weeks $CAD
  • As UK vaccination rates have slowed, coupled with a backdrop of calmed UK Gilt yields, the British Pound’s relative appeal that carried it through the first three months of 2021 has been tarnished. Get your market update from @CVecchioFX here:https://t.co/7aZHtoa1vg https://t.co/YQYvJ17SMb
  • For most of 2021, the US 10Y yield remained in an ascending channel. In recent sessions, yields have cooled thanks to a dovish Fed. Also of note, markets appear to be signaling that US outperformance is now fully priced in. https://t.co/QD7ctvXB6T
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.40% Germany 30: 0.35% FTSE 100: 0.27% US 500: -0.01% Wall Street: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/TQst43wrMf
  • GBP: Gradual chopping decline since Feb smacks of corrective behavior. Bull-flag coming into view that could soon trigger. Get your $GBP market update from @PaulRobinsonFX here:https://t.co/ndjE4K0Nmk https://t.co/8dxgUTYH7V
  • #Bitcoin lower by more than 2.5% as Turkey bans crypto payments, citing risks #BTC $BTCUSD https://t.co/KFj1mJjBpp
What Kind of Risk Does FANG Represent to Global Risk Trends?

What Kind of Risk Does FANG Represent to Global Risk Trends?

John Kicklighter, Chief Strategist

Talking Points:

  • If you intend to trade EURUSD or any Euro crosses, be mindful of the difficult fundamental landscape ahead
  • Updates on the EU-US trade talks will start to cross the wires later today after Trump and Juncker/Malmstrom wrap up
  • It is likely that the talks will end with uncertainty which would keep the market on edge ahead of Thursday's ECB decision

What makes for a 'great' trader? Strategy is important but there are many ways we can analyze to good trades. The most important limitations and advances are found in our own psychology. Download the DailyFX Building Confidence in Trading and Traits of Successful Traders guides to learn how to set your course from the beginning.

Make No Mistake, Risk Trends Have Stretched Far Beyond 'Value'

It is a frequent contention of mine that capital markets - particularly US equity indices - have run far beyond the fair value supported by traditional measures such as growth or returns. Support for this indulgence has shifted over time. In the beginning of the decade-long climb from these risk-leaning assets, the advance was deserved recovery as the scourge of the Great Financial Crisis passed and investors recognized a field of opportunity. Yet, after so many years of advance and through a leveling out of economic growth to complement the market performance; the responsibility for progress increasingly shifted to the purview of unorthodox motivators. Central banks were a crucial piece of the puzzle that promoted stability and recovery, but their infusions into the financial system continued growing long after the recovery was under way and the pace of economic expansion started to flag. This prompted a 'moral hazard' that prioritized speculation. In more recent months, the central banks have maintained their presence in mass; but the slow withdrawal continues. Where this could draw attention to the imbalance in market prices and returns, we instead have found the appetite for yield hold fast - a fear of missing out (FOMO). Eventually though, this house of cards falls.

What Kind of Risk Does FANG Represent to Global Risk Trends?

The Many Fundamental Themes Prodding the Bee's Hive

If market participants were to collectively evaluate the health and capacity of the global capital markets objectively, they would likely find few opportunities for liquid assets trading under their 'book value'. Yet, there is an interest to ignore these critical assessments in favor of maintaining a steady rise in capital gains to support a market starved for yield. That said, complacency will eventually give way to the conditions of excess, and that reckoning will arrive all the sooner depending on how what fundamental cues - or perhaps how man - prompt it. The sparks are currently in abundance across the global financial system. Growth forecasts have notably moderated and the effectiveness of programs designed to leverage the expansion have come up short. The Fed's rate hikes and the start of its balance sheet reduction have ushered in a normalization of life-giving stimulus, and now other central banks are starting to slowly follow in pursuit. The trade wars are perhaps the most pressing threat. While the US and EU paid lip service to optimism over their discussion Wednesday, the practical results were minimal. Meanwhile, the world's largest economy continue to promote discord and protectionism. One of these catalysts - or perhaps multiple acting in concern - will undermine our market's climb.

The Importance of the Metric: FAANG as a Leading 'Risk' Barometer

Eventually the fundamental flame will be put to the financial-scape, and 'risk trends' will collapse under the weight. While it would be best served to approach such a systemic theme with an abundance of caution by waiting absolute clarity that confidence was imploding, for many that would be intolerably too late to act. One means to monitoring the swells in speculative trends as they unfold is to look at favorites that are frequently used to set the level and pace of sentiment. There is no more comprehensive measure of 'risk on / risk off' than keeping close tabs on the correlation across the range of diverse but popular speculative assets. That said, in the hierarchy since the 2009 recovery began, US equities have proven one of the extraordinary outperformer. With this vast asset class, technology shares represent the best performance bar none. Further the largest market cap players make tracking convictions all the easier. The FAANG through this week, however, has reminded us that markets do not simply continue higher forever. Where Google's take home was clearly robust, the Amazon update after hours Thursday was not hefty enough nor influential enough to single handedly revive stretched convictions. Besides, Netflix and Facebook shares were more than painful to offset.

What Kind of Risk Does FANG Represent to Global Risk Trends?

An Unsettled Backdrop for the Tech Giants and Apple Numbers Ahead

Last week, Netflix reported a disappointment in its quarterly update with user forecasts finding hefty revision. In terms of speculative standing, the Facebook shortfall Thursday evening was extreme by any standards. While the earnings fell short of expectations, revenues were still on pace - if wanting. Nevertheless, Google and Amazon's showings could be construed as beneficial, but whether they override fear from Facebooks' record breaking collapse (the biggest single day loss in capital terms on record at nearly $120 billion in value). What is interesting in the FANG / FAANG group is that it has been used as a speculative torch bearer for years. As the collection of Facebook, Amazon, Apple, Netflix and Google rose; we would see so many other sentiment-driven markets rise in pursuit. What happens though should this concentration of a risk primer fall apart? Will sentiment inevitability collapse or would complacency shift the focus elsewhere. Friday will be crucial to evaluating how Wednesday's epic Facebook collapse balances against the moderate improvement in Amazon figures. Further, next week, Apple is due to report its own numbers. This is singly the largest company in the world with a market cap that is close to the fabled $1 trillion objective.

What Kind of Risk Does FANG Represent to Global Risk Trends?

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES